Sampan

$XPeng(XPEV.US)'s attempt on the L03 is very forward-looking. This car, which complies with Chinese, European, and Australian safety regulations from the get-go, clearly aims to extend the battlefront and attempts to capture the sales of its competitors in the most mainstream price segments in target regions. The product itself is fine; it all depends on how the sales channels are laid out. Looking at the code, this car seems unremarkable, but among this year's batch of foolishly and fiercely competing automakers, it might actually be the one most likely to achieve a miracle through sheer effort.

In the automotive market this year, I've seen two products that are the most normal and down-to-earth: Leapmotor's lafa5ultra, a perfect example of product definition and value system integration; Leda Auto's L80, an excellent practice of architecture optimization and cost sharing. The product strength of these two cars is not the focus, but rather precise execution: even if this approach brings 50% shortcomings, the remaining half of the advantages will allow me to survive better.

By deeply understanding the past and present of these two products, you'll understand what I mean. China needs more such good products to push the industry towards mature and standardized operations.

$Li Auto(LI.US) 9 is bad, 8 and 7 are definitely bad too. A world with only 6 is destined to be a year of burning cash with low margins. Nio's attack on livis is just the beginning. What Li Xiang fears is a sudden emergence of a new ES6 that completely blocks the escape route.

However, the darkest hour is not only in the automotive industry. Looking at the retail sales data, I can only say that at this critical juncture, it's really bold to still launch a three-row vehicle priced at the 500,000 yuan level. Even if you bet on the middle class recovering quickly and on them having more children and loving to have them, forget about cars, even the mid-to-high-end catering industry is almost being taken away.

Let's not even talk about positioning issues. For this brand's cars, positioning is the least of the problems. Learning to respect the course of the times is also very important.

In today's Li Auto, I don't see this kind of respect. This series of controversies looks very farcical. You really don't treat users as normal people. Is the product good? Of course it is, but the entire narrative logic and value system are completely collapsed.

Ferrari's Luce is the embodiment of today's Silicon Valley hardware teams trying to control the high-end brand: applying the precise, high-end perception from consumer electronics to a brand, focusing more on product stories than brand stories, with implementation solutions that are more about finishing than the internal core structure/working principles. So you'll see things like 2.3 tons not being important but the air vents must make a clicking sound when twisted by hand, the wipers are mounted on both sides of the windshield like a heavy truck but they serve to achieve a lower drag coefficient, and so on.

The weird thing is, I think Ferrari did nothing wrong doing this for the first time. This solution, like the first-generation gold Apple Watch, will become quite rare over time, and is instead the most peculiar and memorable Ferrari of recent times. From this perspective, today's Silicon Valley teams also have some characteristics of the baby boom era. Interesting.

$NIO Inc(NIO.US)'s future product strategy currently seems to follow the path of Ledao's long-term main brand, with the ES6 replacement likely being the size of the Ledao L80. The ET line also needs to follow the approach of the SU7L to have a greater chance. For battery swapping, the options are either to pursue ultimate compactness and excellence (Firefly) or, from an operational perspective, to focus on larger vehicles to ensure operational stability and user experience, which is the right path. The ES8 broke the mold and has performed quite well, and the ES9 wave won't be much worse than Livis, fully demonstrating that battery swapping is a plus for large vehicles (lower usage costs, better refueling experience), so why not do it?

If the battery-swapping series' 5566 follows the old roadmap, it has little future. A product feature that falls between two stools is not a good plan, no matter how much it's praised. To sell explosively at this price point, the ET5 now needs to use the Aito S9 as a reference.

People who really like the current form of the 5566 can buy it now, as this type of car probably won't appear again in the future.

$Li Auto(LI.US)'s inability to manage price expectations for new products is not a good thing for the domestic automotive market. It indicates that the core competitive advantage of new energy vehicles with medium-to-high customer unit prices is no longer the product itself but the sales channels. The paradigm of the gasoline car era is making a comeback. A brand that has diversified its sales channels in advance（CE/offline agents/online direct sales/third-party platforms）can leverage its multi-touchpoint advantage to challenge your product strategy in flexible areas such as exposure, rights, and services. However, there has never been a precedent where a single blockbuster product could fully open up all channels. Or to put it another way, if all channels were opened up, Li Auto's cash position at this moment might not be much better than its new force competitors. Reducing product costs would only worsen the problem. It's caught in a dilemma: spending money isn't the answer, and not spending money isn't the answer either.

Livis is not a product suitable for Li Auto's current ideal. It has neither channel empowerment nor service empowerment; a pure product attribute cannot support a premium. There is reason to speculate that the price of the L9 will directly drop by 100,000 yuan to survive. This is not a problem of vehicle gross margin, but a rebalancing issue between the product and sales channels. If Li Auto pushes all profit points as implicit conditions of the car price for partners to figure out, the result might be even lower than a direct 100,000 yuan price cut, because you are not the dominant product side.

This lineup still having four products might also be a relatively outdated segmentation method. I don't quite understand it nor am I optimistic about it. Anyway, in the end, for the large five-seater and six-seater, it can only keep the cheaper one.

$Li Auto(LI.US)The only solution for this car model is to quickly revise its launch strategy and debut at the same price as the Aito V9. Furthermore, the subsequent L9L7 must decisively undercut the Aito by one tier to compete. Otherwise, this year's new product GTM strategy is finished.

$Li Auto(LI.US)'s most important product is its sales channels, not the individual vehicle. Is Livis a good model? Of course, but the urgent problem it needs to solve is achieving the same level of popularity as Aito, not having a 10-point lead over competitors in the car itself. In fact, all automakers trying to create hit products this year will face the challenge of increasing channel utilization. Eliminating flagship stores in first-tier cities and embracing auto malls is a matter of going with the flow, but central areas in lower-tier cities cannot be missed.

In these regions with huge potential, the visibility and brand reputation boost from auto malls is extremely limited, so implementing segmented strategies in different regions is a top priority.

I believe the important reason Li Auto has this capability is that it has done sufficient educational groundwork in first-tier cities. Now, when it comes to penetrating lower-tier markets and bringing in the older generation, the resistance will be much smaller. The same theory applies to Nio and XPeng, but their average order value is still slightly lower than Li Auto's for now.

$Li Auto(LI.US)'s most important product in the next few years is not a car but a more adaptable vehicle platform. As competition among leading brands increasingly focuses on sales channels, the product matrix becomes particularly crucial. Just making SUVs won't work, just focusing on one type of powertrain won't work, and just targeting the family market still won't work. If they don't figure this out, they'll keep getting beaten, especially by Huawei's matrix strategy. Why do they need IPD? Actually, they've never really understood it or used it correctly, otherwise they wouldn't be in this predicament.

$NIO Inc(NIO.US)'s comeback requires the 5566 upgrade. The BMW 3 Series only truly opened up its thinking after the L version was released, so the evolution trajectory of 5566 has precedents. The downside might be that its coolness will be significantly reduced, and it's highly likely to degrade into a grocery-getter, but for Nio, it's the right move.

Frankly, whether they talk about smart features or not doesn't matter—soon, no one will choose Nio for its smart features. They'll just see it as a reliable car, and that's enough.

Smart features are a double-edged sword. I must point out that many automakers will suffer badly because of this selling point—and it's not due to technical issues.

$Li Auto(LI.US)'s darkest moment was probably when the updated L series was officially unveiled. All its cards had already been played by its competitors months ago, and even the path of price wars was completely exhausted, so I'm not optimistic about this line's refresh at all. I don't understand how with so much cash on hand, R&D efficiency is so poor, and yet some people still think it's a stable happiness—did they even share any profits with you?

The i series isn't a good breakthrough point, but it's the only direction Li Auto can continue to pursue without being crushed by competition. I think the massive price cut of the i68 and the super flop of the i9 were both expected. Selling the i9 for over 35 is very risky. Those who think this is absurd can come back later—we're witnessing a bad business heading toward an even worse state just to remain a business.

iPhone Air has nothing to do with advancements in the tech tree or material science and structural engineering, nor does it have anything to do with the progress from x86 to x64. It's purely a foolish decision to increase gross margins. Users don't not need the Air, but this is clearly an SE.

$Li Auto(LI.US) is indeed prioritizing gross margin over guidance. It's very understandable. The biggest issue with maintaining guidance isn't negative gross margin but directly undermining Li Auto's value system. If that's the case, then it's a no-brainer to hold until the 26th generation refresh. As mentioned before, the performance of Li Auto's pure electric vehicles is likely to be mediocre at best. The bottom line isn't about profitability but brand positioning. Thinking this way might be better.

$Li Auto(LI.US) Most likely, Li Auto will have a tough time this year. Not optimistic about this guidance.

$Li Auto(LI.US) The next script might not be enough even with five years of interest-free loans. I thought Nio was crazy, but not this crazy. Unless Li Auto completely abandons its sales guidance in the second half of the year, this wave of price cuts is really brutal.

$Li Auto(LI.US)'s deliveries can be interpreted from two points. The reduction in extended-range models is normal, as the product cycle is nearing its end. The current product strength combined with the price will pose significant challenges even for the L6 in the second half of the year. The market has already made its choice regarding this decline.

I don't think the pure electric part is as bad as imagined. The i8 is no longer a volume driver; its core task is to absorb the volume of L7 and L8, preparing for the SKU reduction in extended-range models.

Li Auto's growth driver next year will rely on pure electric models. The current organizational structure makes it difficult for the extended-range product strategy to adapt to multi-front operations. Even if they update the range to 400 kilometers, the Apple-like product approach will quickly hit its limit. Cars are not high-frequency replacement items, and the novelty of minor iterations won't last more than five years.

$NIO Inc(NIO.US)The actual insurance volume of Ledo is more important than the large order volume, after all, there have been too many cases of starting strong but ending weak. The pricing is quite aggressive, and the weak points in driving performance can be left to the ES9 to address, which is fine. I believe the pricing of the latter will also see a significant adjustment compared to before, and I'm optimistic about it.

$XPeng(XPEV.US)I personally really admire the new P7. Next, it depends on the pricing. If it's set right, the days of SU7 selling futures with 400V will come to an end. I'm also optimistic about this. By the end of the year, there will be the G9 and X9 with range extenders, launching a strong offensive. This year, XPeng has changed its game.

$Li Auto(LI.US) will face significant challenges in the near future. Let's not talk about pure electric vehicles for now. The range extender line is starting to show its age with the launch of IM Motors' large-battery plug-in hybrid, and it will likely lose market share gradually. The i6 needs to be developed, and the next-gen range extender should also be accelerated. The first two are aggressively attacking its core market, so it's better to avoid things like truck collisions, which only lead to PR disasters and prove nothing.

Here are a few issues I noticed with the i8:

1. Pricing isn't the real issue—positioning is. If the i8 is meant to be a pure-electric L9, why stick to a strict 5-meter length limit? It could easily extend the rear by another 20 cm, which would at least explain the lack of a front trunk and the shallow rear floor. A large six-seater that can't hold luggage for a cross-province trip is bizarre. For ICE cars, the engine, fuel tank, drivetrain, and safety requirements make storage limitations understandable, but why is it so bad for a pure EV? The only explanation is that there was supposed to be an i9, but somehow Li Auto scrapped it, thinking the i8 was enough.

2. The exterior was tweaked to look more conventional, but the buzz during the reveal wasn't particularly strong. I get their reflection on the MEGA, but the changes didn't translate into actual sales. Now, with MEGA's numbers rebounding, those adjustments seem wasted. At the end of the day, if you change to please traditionalists but don't go all the way, you're neither here nor there. If the front of the car gets rejected in showrooms, does the rear even matter?

3. Standard air suspension as a price anchor doesn't mean much in the pure-EV battlefield. Tesla doesn't have it at all, Xiaomi only offers it on high trims, and others have it standard at lower prices. Holding above 300,000 is a gamble—not worth it. Also, worrying about the i8 cannibalizing the L8 at this stage is dangerous. If you're making the i8, the L8 has to be the sacrificial SKU.

4. The i6's pricing is a hot potato. Competitors' large six-seaters are already near the YU7's entry-level price, making the 'family appeal' angle almost impossible. But 'sporty' doesn't fit Li Auto either, so pricing is critical. I think the i6 shouldn't exceed the L6's current price—at least that way, it can help transition the brand to a pure-EV lineup without losing volume.

5. The lineup is comprehensive, but points 1-4 seriously hurt marketing efficiency. The i8 is stuck for now, so it's up to the i6 to fix these issues.

$Li Auto(LI.US)Although the i8 has been hyped a lot, after actually seeing it, I think it should be priced more like a sedan. Tonight's 32, although exceeding expectations, still has a premium of 40,000 to 50,000 compared to competitors. I think it needs an Air.

$Li Auto(LI.US) Don't rush to buy

$NIO Inc(NIO.US) Don't even consider it, the BAAS strategy must be abandoned. Given the current state, if you still go for the monthly battery swap plan, it's like burying 5566 directly. Most likely, the energy sector will be spun off. Just focus on the gross margin per vehicle, and forget about services. It's time to go all in. This isn't Game 7; it's more like being down 2-0 in the third quarter with the opponent leading by 20 points. Don't forget XPeng hasn't played their cards yet. The G7 and new P7 are blocking the 25 and 20 routes. How will you respond?

The hot topic tracking of LeDao is also suffocating. How can they still be stuck on 20? Isn't that what the ET5 should be doing?